“The market has built about a $3 to $5 a barrel risk premium into the price of oil since the fighting began last week,” Dominick Chirichella, analyst at the Energy Management Institute, tells Dow Jones Newswires’ David Bird. “The price of oil will likely fall quickly and pretty strongly” in the event of a diplomatic resolution, Bird quotes him as saying.

Today’s loss – 3.1% at this writing — puts the commodity on track to wipe out yesterday’s gains, and then some. Oil futures settled with a gain of 2.7% at $89.28 yesterday, the highest settle value in a month.

The United States Oil Fund (USO), the United States 12-Month Oil Fund (USL) and the Barclays iPath GS Crude Oil Total Return ETN (OIL) are down anywhere from 2.5% to 3% in Tuesday afternoon trading.

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As exchange-traded funds and other investing vehicles have ballooned in number, the task of figuring out what works well and what doesn’t has only gotten harder. Barrons.com’s Focus on Funds looks under the hood of ETFs, mutual funds and hedge funds for overlooked values, actionable ideas and the latest pitfalls for fund investors.

Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.